Marcus & Millichap

National Hospitality Research Report

National Report, Midyear 2017

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Investors Maintain Confidence in Hospitality Market As Occupancy and Revenue Metrics Improve

Hotel room demand persists. The U.S. hospitality sector has recorded increases in occupancy and revenue metrics during the year ending in June as room demand remained healthy. Employment growth nationwide and the rising median household income will support travel in the near future. Both domestic and international travel continue to rise, further benefiting room demand. Potential headwinds do exist including the growing construction pipelines in many major markets that may place downward pressure on occupancy, the average daily rate and RevPAR this year and into 2018.

Investors increasingly targeting hotels as demand drivers improve. Hotel operations that spur revenue growth have kept buyers active in this sector. Transaction velocity rose roughly 10 percent nationwide as demand picked up for properties in many of the country’s smaller markets. On average, hotel assets changed hands for nearly $100,000 per key, down slightly year over year as fewer properties in upper chain scales changed hands.

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